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The only way is up for Greek credit rating

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The only way is up for Greek credit rating
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Standard & Poor’s has raised Greece’s credit rating.

It is now no longer in default territory, but remains firmly in the junk category with a CCC rating.

The upgrade was expected after Athens slashed its debt by about a third with a massive sovereign debt restructuring.

But S&P is still warning that a deep recession, unpredictable elections and anti-austerity anger threaten Greece’s efforts to put its finances back on track.

“While the exchange has, in our view, alleviated near-term funding pressures, Greece’s sovereign debt burden remains high,” S&P said in a statement, adding that it expected the debt to stay as high as 160-170 percent of GDP in the next three years.

S&P assigned Greece’s rating a stable outlook, indicating it was not planning to change the rating again soon, but it warned that risks remained.

“The ratings could be lowered if we believe that there is a likelihood of a distressed exchange on Greece’s remaining stock of commercial debt,” it said.

Fitch assigned Greece a slightly higher B-rating in mid-March, becoming the first major rating agency to upgrade Athens’ rating after the swap cut its debt by about 100 billion euros.

Moody’s is the only one of the three major rating agencies to have kept its Greek rating unchanged at the lowest level. It has said it would revise the rating “in due course” and that any upgrade would likely be small.